Use the following information to answer the next fifteen questions. The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity After the tax, PC is the price consumers pay, and PS is the price producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers.

Use the following information to answer the next fifteen questions. The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity After the tax, PC is the price consumers pay, and PS is the price producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 20RQ: Under which circumstances does line tax burden fall entirely on consumers?

See similar textbooks

Similar questions

Price elasticity of demand for gasoline is estimated to be -0.3 in the short run and -1.2 in the long run. A decrease in taxes on gasoline would:O A. raise tax revenue in both the short run and long runO B. ower tax revenue in both the short run and long runO C. lower tax revenue in the short run but raise tax revenue in the long runO D. raise tax revenue in the short run but lower tax revenue in the long run
Consider the following demand and supply function of product ZT: Qd = 25 - 1.25 P Qs = -9 + 3 P Note: Determine the equilibrium point first to answer the following question. 3. How much is the producer surplus, with out sales tax? Use a number, 2 decimal values, no commas, no space, no signs. * 4. What is the equilibrium point? * a. (15 , 8 ) b. (8 , 15) c. (8 , 25) d. (15 , 21)
a. What is the consumer surplus at a price of $7? b. What is producer surplus at a price of $7? Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
Assume that the elasticity of demand for fanta is -0.8 while the elasticity of supply is 0.4. What is the pass-through fraction of a tax on fanta to consumers? B. Assuming a tax of K12 is applied on each bottle of fanta, how much of this will be borne by producers. C. If the original price was K30, what would be the new equilibrium price?
A movement along the demand curve for dry mangoes would result from: Select one: O a. Introduction of a tax to be paid by buyers. O b. Introduction of a tax to be paid by sellers. O c. Decrease in the number firms producing dry mango. © d. Increase in income of mangoes consumers
Consider an ad-valorem tax on a good X. The Demand for good X is constant elasticity with elasticity -2. The Supply for good Y is constant elasticity with elasticity 3. Consider the same setting as for the previous question. When a tax of 1% of the price is imposed on good X, then equilibrium quantity of X exchanged declines by what percentage?
Only typed answer Green et al. (2005) estimate that the demand elasticity is minus−0.47 and the long-run supply elasticity is 12.0 for almonds. The corresponding elasticities are minus−0.68 and 0.73 for cotton and minus−0.26 and 0.64 for processing tomatoes. If the government were to apply a specific tax to each of these commodities, what incidence would fall on consumers? The incidence of a specific almond tax that would fall on consumers is nothing___percent. (Enter numeric responses using real numbers rounded to one decimal place.)
Suppose an economist estimates that the price elasticity of supply for red wine is2.4 while its price elasticity of demand is -4.0.If the government decides to impost a per-unit sales tax of $40 per bottle of redwine, how would the market price for red wine be affected? Show yourcalculation.
The demand curve for product X is given by QXd = 380 − 5PX.a. Find the inverse demand curve. Instruction: Enter all values as integers, or if needed, as a decimal. PX = ____−____QXdInstructions: Enter your responses to the nearest penny (two decimal places).b. How much consumer surplus do consumers receive when Px = $55?c. How much consumer surplus do consumers receive when Px = $35?
a. Assume that the elasticity of demand for Fanta is -0.5 while the elasticity of supply is 0.7. Assuming further that a tax of K10 is applied on each bottle of Fanta sold, how much of this will be borne by producers. b. Assume that the price of good X is K10 while that of good Y is K20. A consumer has allocated consumption between the two goods in such a way that the marginal utility of X is 15 utils and that of Y is 25 utils. Is this an optimal consumption bundle? If not, what should the consumer do to reach the optimum?
The market supply and demand for a product are shown in the diagram below. Is the price elasticity of supply less than one, equal to one, or greater than one? Explain. Calculate consumer surplus at the equilibrium price. Show your work. Now suppose the government imposes a per-unit tax of $1 on producers. What happens to total revenue received by producers after they pay the tax to the government? Explain. Will producer surplus increase, decrease, or stay the same? Will total surplus increase, decrease, or stay the same? Explain.
6c Suppose that the government imposes a constant per-unit tax of 2 centon producers. In the diagram, show the effect of this tax on the prices ofplastic bags faced by buyers and sellers.